Taking Stock / Translate `accountable'

The Oxford English dictionary has more than 500,000 terms. The Even Shoshan Hebrew dictionary has 70,000.

Well, okay. There are all sorts of words we Israelis don't need, like "icebreaker boat." But there are some we do need, yet they remain untranslated into Hebrew. One such word is accountability.

The accountable person is the one bearing the responsibility. He's where the buck stops.

On Monday, Haaretz reported extensively on the pension fund scandal at the Egged bus company, how its deficit ballooned to NIS 3 billion or maybe even NIS 4 billion, and why it's all too likely that you and I, the taxpayers, will be making up the difference.

What was glaringly absent from the article? Who is accountable. Who bears the responsibility and should accept the consequences. As usual in cases of scandal in Israel, the buck is drifting about and it's hard to pinpoint who should be losing sleep now that the truth has been exposed.

That is how Israel's public sector is, though. No responsibility. No reporting. No accountability. From time to time, the press or state comptroller complains, but after a day or two of yelling, the noise dies down.

Business as usual

The pension fund of the Egged workers is a highly complex story, but it boils down into something pretty simple. Egged paid into the fund and promised its workers excessive retirement conditions that it could not possibly fulfill. It promised them not the usual 70 percent of their pay, but 105 percent.

Who approved the payments? The treasury, naturally, being the one approving subsidies for the national bus cooperative. Year in and year out, the treasury gives Egged between NIS 700 million and NIS 800 million of taxpayer money.

Who are the treasury people responsible for the situation? Who knows. It's been going on for years, passing on from one government to the next, from minister to minister, from clerk to clerk.

It turns out that back in 1988, the deputy capital market commissioner at the Finance Ministry wrote to the manager of the Egged pension fund, saying, "I cannot understand how money is continuing to be collected from the (Egged) members while it is far from sure they will get the pensions for what was collected from them in the past, before the hike".

Or: Sir, the fund is going broke and you're pretending it's business as usual.

The only crystal-clear element is where these clerks are now - at Egged, at Egged's assets company, at the Military Industries and the Israel Aircraft Industries, at Rafael Armament Development Authority, at the Mekorot water utility, at Bezeq (TASE: BZEQ), at the Ports Authority and at the hundreds of pork-barrel-ridden government entities that these people were supposed to supervise and regulate when they were in government.

The system is perfectly well known. You stay 10 or 20 years in government service for low pay, then make the leap into one of the regulated government companies or authorities where salaries are sky high. Behind you, at the treasury or other regulatory body, are all your friends and colleagues, who know their roles perfectly well. Their turn will come one day.

The press loves attacking the fat cats with all the political connections. But some of the CEOs, businessmen, fixers and lawyers actually do act to promote the greater good of the shareholders. And all too often, the ones who are not acting in good faith are the regulators, who are supposed to be watching out for the taxpayer's greater good.

Who lets them get away with it?

Two years ago, Moshe Keret, the manager of the Israel Aircraft Industries, squandered $100 million buying a third of Elisra's shares at an inflated price, just to show Yossi Ackerman, the CEO of the privately held rival company Elbit Systems (Nasdaq: ESLT), that he had the bigger one. Elisra has since slid into the red, but what's a piffling $100 million to a giant like Israel Aircraft Industries, a company to which the state gave billions of shekels to finance pensions for workers?

Who agreed to let Keret fritter away $100 million? Major acts by government bodies need approval from the treasury, from a ministerial committee, and the okay of the prime minister, too. Guess - go on, guess - who let Egged accrue that insanely huge deficit in its pension plan, and who allows gigantic sums of money to stream unchecked to the government bodies?

You got it, clerks in government. Clerks who are about to wrap up their public careers and make the big jump to a plum job at one of the government units. How do we know? Because the story always ends the same way. The taxpayer picks up the bill for the mistakes, and the clerks get the jobs.

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